Bloomberg – U.S. job growth accelerated in June, suggesting firms are having greater success recruiting workers to keep pace with the broadening of economic activity.
Nonfarm payrolls increased by 850,000 last month and the unemployment rate edged up to 5.9%, a Labor Department report showed Friday. May payrolls were revised up to a 583,000 gain. The labor force participation rate held steady and remained well short of pre-pandemic levels.
The median estimate in a Bloomberg survey of economists was for a 720,000 rise in June payrolls.
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Demand for labor remains robust as firms strive to keep pace with broader economic growth, fueled by the lifting of restrictions on business and social activity, mass vaccinations and trillions of dollars in federal relief.
At the same time, a limited supply of labor continues to beleaguer employers, with the number of Americans on payrolls still well below pre-pandemic levels. Coronavirus concerns, child care responsibilities and expanded unemployment benefits are all likely contributing to the record number of unfilled positions.
Those factors should abate in the coming months though, supporting future hiring. Wage growth is also picking up. A report Thursday showed small companies are raising compensation to attract workers, consistent with similar developments at larger firms such as FedEx Corp. and Olive Garden parent Darden Restaurants Inc.
“Job gains should pick up in coming months as vaccinations rise, easing some of the pandemic-related factors currently weighing them down,” Federal Reserve Chair Jerome Powell told Congress on June 22.
While net job creation has been lower, actual hiring is high, offset by elevated levels of quits and retirements, he said. That underscores elevated churn in the labor market.